Allbirds: Pioneering Sustainable Footwear

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The San Francisco-based Allbirds was founded by New Zealander Tim Brown in 2014. Years later renawables expert Joey Zwillinger came on board with the goal of creating a revolutionary, planet friendly wool fabric designed to be used in footwear. The majority of Allbirds’ products are still made from that fabric: ultra-fine, sustainably sourced New Zealand Merino wool. Allbirds’ self-created wool is so fine, in fact, that it’s 1/20th the diameter of a strand of human hair. Because of this, it wears more softly and comfortably than other types of wool.

Inspired by Nature

The company is unique in its founders’ willingness to research, test, and implement unique natural fabrics into their products. As Allbirds has grown, it has remained true to its founders’ vision of creating sustainable products made from natural materials including trees and sugar. The company’s tree runner shoe is made out of eucalyptus pulp instead of wool, so there’s something from all of nature’s world.

[callout]Allbirds boasts the “world’s most comfortable shoe,” but that’s not the main reason they’re ranked as a Robin Report Retail Radical this year. This direct-to-consumer brand is a certified B Corp that’s focused on sustainability, while offering comfortable, high quality footwear, apparel and accessories.[/callout]

Allbirds has been 100 percent carbon neutral since its inception, but that’s not all. The company has also been a Public Benefit Corporation since 2016, encouraging consumers to learn about how to measure their carbon footprint and how brands achieve their rankings.

Since then, the company has achieved B Corp certification. What makes Allbirds truly unique, however, is that the founders continually strive to improve the sustainability, animal welfare, and comfort level of their products. From creating shoelaces made from recycled plastic bottles to using 90 percent recycled carboard in packaging, Allbirds has been a trailblazer since day one –– setting a new precedent for comfort, innovation and sustainability in footwear.

Purposeful Commerce

Allbirds collaborated with a group of finance, sustainability, and social impact leaders to develop an SPO Framework by which to analyze the company. The SPO Framework covers six categories, including: Mission and Purpose, ESG Rating, Climate and Environment, Value Chain, People, and Governance.

Through its collaboration with SOLES4SOULS, Allbirds gives customers the option to donate their lightly used shoes to charity. Allbirds also donates their returns to SOLES4SOULS, an organization which helps to empower people living in poverty by creating jobs for them.

Allbirds also donated $500,000 worth of shoes to healthcare workers who requested a pair online within the span of just five days during the onset of the Coronavirus pandemic. When healthcare workers’ demand for Allbirds shoes exceeded what the company could donate without going into the red, the founders created a “buy one, give one” option that enabled customers to donate a second pair of shoes to healthcare workers at a lower-than-retail price point.

Financial Report

Despite the disruption of the pandemic, Allbirds\’ revenue increased 13 percent in 2020. That came on top of 50 percent-plus growth in 2019. Gross margin reached a new high of 51.4 percent last year, thanks to the company\’s growing scale and its continued focus on a direct-to-consumer business model. Domestic aided brand awareness stood at just 8.4 percent in the fourth quarter of 2020 but has been rising rapidly, suggesting that Allbirds is still in the early phases of its growth in the U.S. The company ended 2020 with just 22 stores globally, but it sees room to operate hundreds of stores in the future. That store fleet expansion, combined with increased marketing investments, will boost brand awareness, supporting Allbirds\’ long-term growth. International expansion and the broadening of Allbirds\’ product assortment also represent powerful growth levers. In early November, Allbirds raised $253 million before fees in its IPO, giving it a sizable war chest to finance its growth plans.

In-Store Experience

Its physical stores are another component in the secret sauce of Allbirds’ success. The Robin Report covered the store in 2019: “The store segments its assortment into sections by the material the shoe is made from,” she says. “Tree or wool, and then by shoe type: lounger, runner, and skipper. They educate shoppers on how the shoes come to be, but at the same time, they also don’t take themselves too seriously, naming their tree and wool materials ‘Twiggus lightandbreezius’ and ‘Sheeplus softandcozia,’ respectively.”

“Allbirds’ relentless drive for sustainability has make them a disruptor and one to learn from in the apparel industry.   They’ve taken comfortability to a new level while delivering high quality footwear and accessories to a fan base that is appreciative of their transparency and their drive to prioritize the planet, not just profits.  Allbirds is a Mother Earth approved Retail Radical,” says Matt Laukaitis, EVP and Global GM, SAP Consumer Industries.

Iterating Innovation

The driving factor behind Allbirds’ success is an ongoing refusal to remain complacent in any aspect of the business, particularly sustainability. Its founders’ constant drive to innovate is what earned the company a place in the Robin Report Retail Radicals lineup this year.  With initiatives in regenerative agriculture, carbon offsets, responsible energy, renewable materials and Co2 offsets, Allbirds is a shining example of how one company can make a difference in the lives of its customers, its workers and the planet.

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